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Yellen at Jackson Hole: The case for an interest rate hike has strengthened

News by Newsroom on 10:01 EST August 26, 2016
Fed chair Janet Yellen is deliving her speech at Jackson Hole economic symposium on Friday. Here are the headlines: * The case for an interest rate hike has strengthened in recent months * Interest rates for the long term expected at 3% * Fed still has plenty of ammunition to fight downturns * Business investment remains soft and subdued foreign demand and the appreciation of the dollar since mid-2014 continue to restrain exports * Nearing employment and inflation targets EURUSD down 50 pips on the news but making new highs subsequently. S&P 500 originally ...

Silver technical analysis

Tech analysis by Simon Kazinsky on 12:27 EST August 25, 2016
Silver is lingering at an important support. After climbing above $21/oz a few weeks ago the asset has been correcting since. The metal broke important long term resistances earlier in the year and, since then, our view is bullish on this instrument. I am looking for signs that price action is sensitive to this level. If silver manages to set some blue candles on the days to come we will be in a position to assume the market ...

Strongest and weakest currencies this week

News by Newsroom on 06:42 EST August 22, 2016
Price action for most assets over the past 7 trading days has been against the long term trend. The best example is the weak British pound saw gains across the board and was the strongest among the majors. Silver, which has seen whooping gains for the past months has been sold aggressively. Gold faired a bit better but, still, did not make any advances against the US dollar. The euro and the Swiss franc are ...

S&P 500 technical analysis

Tech analysis by Simon Kazinsky on 05:20 EST August 09, 2016
After breaking above 2,037 our previous call for a multi year high in the index set last year was broken. Indeed, the top lasted for more than one year but the correction was not as large as anticipated. Therefore, I have placed my bearish view for stocks on standby until, at least, the present move up gives signs of exhaustion. As can be seen on the first chart this would imply breaking below the supporting moving average now ...

Bank of England lowers interest rate to historic low

News by Newsroom on 07:00 EST August 04, 2016
The Bank of England dropped its key interest rate by a quarter down to 0.25% on Thursday. This is the lowest level in the central bank's 322 years history. The vote in favour of this reduction was unanimous among the nine members of the Committee. The BoE also decided to expands QE by £70bn though two members dissented. The pound lost a cent against the dollar immediately after the news and stocks ...

A short squeeze may be on the cards as GBPUSD is most shorted in decades

News by Allie Longford on 13:39 EST August 01, 2016
Short positions outnumbered bullish bets by 80,572 contracts last week, according to the latest U.S. Commodity Futures Trading Commission data, making this the largest collective bet on the pound to fall against the dollar in decades. The danger for a temporary massive short squeeze emerges as a vast majority of traders pile in against the British pound. A move in the opposite ...

EURUSD technical analysis

Tech analysis by Simon Kazinsky on 18:11 EST July 30, 2016
EURUSD was about to move into bearish territory... until last Friday. The pair had been weak for the past weeks descending from 1.14 to below 1.10 and taking supports on its path. But it indeed bounced back at the last, but strong, support standing as can be seen on the chart. The pair was unable to break below 1.0950 were both an ascending trendline and a supporting Moving Average on the weekly chart sit. It did so with momentum ...

Dollar getting crushed at the end of the week

News by Newsroom on 11:39 EST July 29, 2016
The US dollar is suffering loses against all majors on the last hours of the trading week. The move started after the disappointing data in the advanced GDP report released on Friday morning. EURUSD is benefiting from the buck's weakness and trades above 1.1150 leaving behind the last major support and moving to safer land in the weekly chart. The move is replicated in other major crosses including commodity ...

US GDP way weaker than expected, residencial and business spending sink

News by Newsroom on 08:31 EST July 29, 2016
The U.S. economy expanded less than expected in the second quarter as companies shrank inventories and remained cautious amid weaker global demand. Gross domestic product rose at a 1.2 percent annualized rate after a 0.8 percent advance the prior quarter, Commerce Department figures showed on Friday. The consensus forecast was of 2.5%. The report comes at the time Federal Reserve ...

Bank of Japan to continue stimulus

News by Newsroom on 23:48 EST July 28, 2016
The Bank of Japan will continue with its stimulus of the Japanese economy but it does not cut deposit rates already in negative territory. The central bank maintains monetary policy program at 80 trillion target while doubles USD lending program to $24 Billion and expands ETF purchases by ¥6 trillion. It also establishes a new facility to lend Japanese government securities. The BoJ statement says they expect to get '...

FED talks the talk but doesn't walk the walk

News by Allie Longford on 00:20 EST July 28, 2016
The Fed stays on hold, upgrades the economy and suggests risks have diminished. The latest FED statement was released on Wednesday with no real surprise in terms of the base staying anchored at the current level. The main points in the statements are: * near-term risks to economic outlook have diminished * job market strengthened, economy expanding at moderate rate * household spending growing strongly, business investment soft * economy to evolve in way warranting gradual hikes Even though the above appears quite hawkish it was not enough to ...

Markets quiet ahead of the FED statement

News by Allie Longford on 05:14 EST July 26, 2016
Currencies and stock indices remain within ranges on early Tuesday trading. The day brings only one important scheduled macro economic data in the form of the CB Consumer Confidence due to be released as the US session starts. All eyes are on the FED meeting on Wednesday and its statement that may provide hints on when or if the central bank is considering raising the base rate another quarter for second time this ...

Hottest currencies this week

News by Allie Longford on 00:42 EST July 25, 2016
The Japanese yen is the indisputable champion after it ended on Friday making the biggest gain versus a basket containing all the majors. BoJ may not announce this week as much stimulus as some were initially expecting and that assumption strengthens the Asian currency at the expense of softer stocks. The US dollar was also strong and the dollar index appears ready for a new leg up. EURUSD is also on the brink of breaking ...

ECB to keep rates low for long

News by Newsroom on 08:43 EST July 21, 2016
The ECB's full statement on Thursday confirms that "the monthly asset purchases of €80 billion are intended to run until the end of March 2017 or beyond if necessary and in any case until it sees a sustained adjustment in the path of inflation consistent with its inflation aim" At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. The Governing Council ...

Dollar index ready on the verge of breaking out

News by Newsroom on 14:14 EST July 20, 2016
The US dollar set a fresh month high against a basket of currencies on Wednesday after strong U.S. data and expectations that the Federal Reserve may raise rates before the end of the year gain some momentum. This week the Commerce Department data showed U.S. housing starts increased by 4.8 percent, underpinning a theme of strength in the economy. Fed funds futures rates imply investors see a 40 percent chance the Fed will raise interest rates by its December meeting up from less than 20 percent a few weeks ago as other major central banks around the world gear up ...

AUDUSD technical analysis

Tech analysis by Simon Kazinsky on 09:34 EST July 19, 2016
AUDUSD is again testing a Moving Average that has acted as resistance. For the past few sessions the Aussie appears weak versus most of the majors, including the troubled British pound. AUDUSD set a red candle on the weekly last week pointing to a reversal at a critical level. The outlook appears bearish for the pair particularly if 0.72 gives way. ...

NZDUSD technical analysis

Tech analysis by Simon Kazinsky on 09:25 EST July 19, 2016
The kiwi is still in a mid/long term decline. NZDUSD has been staging a temporary recovery since September last year when it set a medium term low at 0.62. The pair has reacted as it found a relevant Moving Average that previously acted as support and now has turned resistance. Last week left a significant red candle in a clear short term price action reversal in the chart and the short term continues this week. It therefore ...

What does a fail coup look like in a currency chart

News by Simon Kazinsky on 10:13 EST July 18, 2016
The answer, not much. The Turkish lira has been depreciating against the US dollar for the last few years, similarly to currencies of other emerging countries. As can be seen on the monthly chart the candle for the month of July is unlikely to look very different to others for this currency pair. Although it is a weak currency the Turkish lira offers a high yield. Turkey's central bank holds its key ...

Pound spikes and FTSE 100 turns negative as Bank of England leaves interest rates unchanged

News by Newsroom on 07:20 EST July 14, 2016
The Bank of England has surprised financial markets on Thursday by keeping interest rates on hold in July, as officials were split over unleashing further stimulus to boost the economy following the Brexit vote. In their first meeting since the referendum policymakers voted by 8-1 to keep interest rates on hold at a record low of 0.5pc. The rate has been unchanged for 7 years. Mark Carney, the Governor of the Bank of England, said last month that he believed some stimulus would be required over the summer to support growth while steering inflation back towards the ...

Australian dollar overvalued says top forecaster

News by Newsroom on 02:08 EST July 13, 2016
The yield premium that Australian debt offers over other developed market peers has helped the Aussie, but that might change with the Reserve Bank of Australia having more room than its counterparts to lower its benchmark, according to Unicredit SpA. The "overvalued" Aussie will underperform other commodity currencies such as the Canadian dollar and Norway’s krone, London-based Vasileios Gkionakis head of global foreign-exchange strategy at the firm said Bloomberg reports. With its benchmark interest rate at 1.75 percent is the best deal excluding New Zealand ...

Market in full greediness according to the Fear and Greed index

News by Newsroom on 01:12 EST July 13, 2016
The CNN's Fear and Greed index is now in extreme greed territory reaching an 88 reading in a scale from 0 to 100. The index takes into account 7 different factors: Put and Call Options,Junk Bond Demand,Market Momentum,Stock Price Strength,Extreme Greed,Safe Haven Demand,Stock Price Breadth and Market Volatility. All of them, except the last, sit now in extreme greed territory. ...

Pound rallies as May Prepares to become the new Prime Minister

News by Newsroom on 01:05 EST July 13, 2016
The pound rallied on Tuesday as Home Secretary Theresa May prepares to become the UK next prime minister, removing one layer of political uncertainty. Sterling rose to its highest level in a week versus the dollar as investors consider the implications of the new premiership on the upcoming UK negotiations with the EU. May is poised to take office by Wednesday night London time, replacing David Cameron after her only rival pulled out of the Conservative leadership contest Monday. The FTSE 100 Index of shares also rose and touched an 11-month high. The pound rose 1.4 ...

Yen biggest 2-day drop in two years on further stimulus hints

News by Newsroom on 00:59 EST July 13, 2016
The yen slid in its biggest two-day drop against the dollar since November 2014 as investors wait for details of the stimulus package advanced by Japan's Prime Minister Shinzo Abe. The Asian currency fell by more than 1 percent against all of its major peers after Abe said he planned to add fiscal stimulus after his victory in last weekend’s upper house election. The premier indicated on Tuesday he will order ministers to prepare plans for further measures aimed at supporting domestic demand. Global stocks took the news with enthusiasm and many indices are now ...

S&P 500 OPENS THE WEEK AT A NEW ALL TIME HIGH

News by Newsroom on 11:38 EST July 11, 2016
The Standard and Poors 500 index started the American session at a new record high trading above 2,040. Futures had anticipated earlier that the indice would finally smash the 2,037 mark made in summer 2015 and that held as the now old time high for more than a year. This is a bullish signal and, even though uncertainty is in the rise, the technical implications are that further upside could occur while stop losses placed above the 2,040 region by bears through the year unwind....

Most wanted currencies this week

News by Newsroom on 03:09 EST July 11, 2016
The week begins with the Japanese yen giving back some of the gains it made in the previous sessions. The Asian currency was the best performing currency within the majors group in the first week of July. Current economic uncertainties around the world make the yen attractive to investors as the currency is perceived as a safe haven regardless of the massive quantitative easing program implemented by the BoJ in previous ...

US non-farm payrolls surges beyond expectations

News by Newsroom on 10:39 EST July 08, 2016
The June US non-farm payrolls report smashed expectations on Friday in contrast with a very weak report the previous month. The US economy added 287,000 jobs in June The Labor Department said well above the 180,000 economists had forecast. The already weak May figure were revised even lower to 11,000 jobs from 38,000. Last month's turnaround was driven by job gains in leisure and hospitality, health care and social assistance, and financial activities. However, the unemployment rate rose to 4.9% in June from 4.7% in May. Wage growth was weaker than the forecast,...

FED minutes suggest rate hike unlikely in the near future

News by Allie Longford on 00:02 EST July 07, 2016
The Federal Reserve released on Wednesday minutes for its last meeting in mid June. Fed officials generally agreed then that it was "prudent to wait" for additional data before considering another rate rise. They wanted more time to see if the economy would keep improving and that new threats wouldn’t emerge after the June 23 Brexit vote. Divisions had already emerged inside the central bank in the weeks after a disappointing May jobs report. At the June meeting, officials sparred over the health of the labor market, the outlook for growth, ...

...and the snowball gets rolling, two other investment funds lock in their clients money

News by Allie Longford on 12:40 EST July 05, 2016
We reported yesterday on the UK based investment firm Standard Life removing participant clients of its real estate fund access to withdrawals for at least 28 days and the similarity of the event to Northern Rock bank run in 2007/2008 just ahead of the financial crisis. The contagion effect has started and two of the largest UK investment firms have joined on Tuesday in disallowing their clients access to withdrawals from similar funds. Aviva and M & G, blame the lack of liquidity as the reason that prompted them to suspend trading of their respective funds. The size ...

Standard Life suspends trading in a fund. Is this the 2016 Northern Rock moment for the UK?

News by Allie Longford on 15:29 EST July 04, 2016
Right before the crash of 2007/2008 there was this moment in UK history when a middle size bank whose core business was lending to stretched home owners / buy to let investors had to stop its operations as it run out of money. At first it did not look a big deal as the financial crisis was still in the horizon, the bank was of a medium size and the UK government and the Bank of England stepped in relatively quick. Although an isolated incident at first, in the UK this was the moment when something started to look uncomfortably wrong to some. The memory of depositors ...

Gold and silver start the week extremely well while oil remains weak

News by Newsroom on 14:55 EST July 04, 2016
Quiet Monday session as the US market remains closed for Independence day. Overall, NZD is the strongest currency against a basket of major currencies at the start of the week. In turn, USD is the weakest across the board. Oil drops by 0.7% which is quite substantial for a single session considering that, at the same time, other commodities like gold and particularly silver ramp up. Winner: NZDUSD 0.53% , Loser: USOil -0.69%, other winners: NZDJPY 0.46%, USDZAR 0.35% other losers: GBPNZD -0.49%, USDNOK -0.47% Volatility: ...


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